Next Year Hermes Will No Longer Forecast Annual Sales Growth.

France

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On Wednesday, it announced that because of the increasing risk of uncertain retail environment for luxury goods, the growth of annual sales figures will not be forecasted next year.

After the news, Hermes shares fell 7% today at 360.05 euros per share.

CEO Axel Dumas said in a conference call: "we must be frank and pparent. Although the first half performance exceeded expectations, there are more uncertainties around the world. If written guidance is too rigid, it means that the company is not flexible."

He said the Group expects revenues to be slightly lower in the second half of the year than in the first half.

In Asia, as the demand for luxury goods gradually decreases, the whole luxury market is experiencing many difficulties, leading to the reduction and reduction in product category by the British luxury brand Burberry.

The production of leather goods is the largest and highest profit category of the group, and some handbags are even placed on consumers' wish list for many years.

Because of the impact of political and monetary policies on the global luxury market, Hermes has reduced its turnover in 2016 by a fixed exchange rate of 8% in February. In the first half of the year, Hermes increased 13% to 545 million euros from the same period last year, and its operating profit margin increased to 32.5% from 32.5% in the same period last year.

As for future prospects, the group said its operating profit margin should be slightly higher than the level in 2015, but it has not been quantified. Hermes has announced the sales figures for the first half of the year, claiming that the second quarter revenue grew by 6.2% to 1 billion 250 million euros.

The company disclosed that the leather products category in Japan, France and the United States was stable.

It is worth noting that although the French terrorist attacks continue to affect tourist flow, Hermes has rebounded somewhat in the second quarter of the French market, and its revenue growth has been 8.9% under the constant exchange rate.

According to the website data, Hermes has slowed down from the fourth quarter of last year, and revenue growth is the lowest level in six years.

At that time, CEO Axel Dumas emphasized that it was premature to comment on profits or sales growth.

Exane BNP Paribas luxury analyst Luca Solca said earlier that high-end luxury retailing is beginning to be affected by the economic cycle.

Hermes competitor LVMH began to slow its organic profit growth in the fourth quarter. Its revenue and profits in the fashion and leather sector recorded a decline in the first half of this year.